Europe Inc.

In Europe, it used to be that the only thing worse than failing at entrepreneurship was succeeding, and making money. Now, suddenly, entrepreneurship is all the rage -- if only there were a few more entrepreneurs.

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When Michel Casas started ACTE SA, a chain of business centers based in Paris, he didn't tell his lawyer, his bank, his clients, or his suppliers about the little electrical repair company he had founded back in 1960; the only ones who knew were the friends from whom he raised the capital. His earlier company, you see, had failed -- and in security-minded Europe, going out on your own and failing means winding up in disgrace. Had all those people known Casas's shameful secret, ACTE might never have gotten off the ground.

Cathy Williams, a British electrical engineer, started two companies -- a distributor of opto-electronic equipment and a manufacturer of liquid crystal displays -- with her husband, Chris. She had plenty of scientific credentials, having worked as a development engineer at Marconi Space and Defense Systems and as a lecturer in electronics at Huntington College. But did she or her husband have management training? "Oh, no," she says. "I can't think of a course offhand where technology is combined with management." Although her previous work had provided her with some managerial expertise, launching the new ventures was a kind of on-the-job training ground in actually running a business.

In Europe, the phenomenon represented by Cases and Williams is big news. France, West Germany, England, and half a dozen other countries are in the grip of a sort of start-up fever, with significant numbers of new businesses springing up for the first time since just after World War II. It is a phenomenon, moreover, with a powerful political edge. European economies in the past several years have virtually stagnated, generating relatively few new jobs, and governments of every political stripe have begun to look longingly at new-business formation as a source of economic salvation. Nothing short of a rebirth of the entrepreneurial spirit, the thinking runs, is capable of pulling Europe's tradition-bound economies into the competitive world markets of the future.

Yet the obstacles faced by Casas and Williams are typical as well. Unlike most of their American counterparts, European entrepreneurs must start their companies in societies in which fear of risk is endemic, and in which institutional support is at best fragmentary. Such obstacles have so far kept the entrepreneurial revival small by U.S. standards. What has kept it going, however -- and what will likely fuel its growth in the future -- is the emergence of a new breed of entrepreneurs who are undaunted by the difficulties, and who seem oddly immune to the fear of failure that permeates their societies. Although still few in number, they are already taking advantage of the favorable political and financial climate to pursue their ventures. Barring economic or stock-market diaster, the momentum for change that they are creating won't easily be stopped.

Solid statistics on the number of new businesses in any one country -- let alone in Western Europe as a whole -- are impossible to come by. Still, the signs of the entrepreneurial boomlet are everywhere.

In France, for example, Casas's 50 business centers -- operations that provide advice and logistical support to start-ups -- have serviced some 6,000 clients in the past five years, with another 1,000 or 1,500 projected for this year. In Berlin, more than 200 new enterprises have opened their doors in the past two years. In Geneva, fledgling venture capitalist Les Hawrylyshyn, a former bank officer, sees two or three proposals a week. Budding technology centers -- "Silicon Glen" in Scotland, "Municon Valley" in Bavaria, and the M4 corridor west of London -- give the boom a high-technology flavor. But it extends well beyond such centers, and well beyond the technologies they represent. According to French government statistics, more than 80% of new businesses are in the service sector; even among manufacturing companies, only about a fifth of new businesses can be classed as high tech.

The American ancestry of Europe's new entrepreneurship shows up in any number of ways. Gilles Macherey, for example, says he "caught start-up fever" at UCLA, where he spent two years getting an MBA; returning to France, he and two partners, also Frenchmen who studied at UCLA, set up an instant-printing business that now boasts some 40 shops. Pierre Grouvel, who founded a company last year called Alcatel Thomson Gigadisc, had worked for IBM, Xerox, and Prime Computer, and had taken a course in advanced management offered by Stanford University Business School at the European Institute of Business in Paris.

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